This could spell trouble for the tech rally

Some big names in the tech-heavy NASDAQ Composite index are getting smacked around this month.

The hits are being felt by a wide-range of NASDAQ companies. There are the upstarts like Netflix, which lost 17% since the start of March, and Tesla, which is down 10% this month. And there are the Internet giants like Facebook (down 5%) and Google (down 4%). And, the ETF tracking NASDAQ's biotech companies, the IBB, is down 10% this month as well.

"The P/E (price-to-earnings) multiple for 2014 on the NASDAQ 100 is roughly about 18 times," says Morganlander about the index of the largest 100 non-financial NASDAQ stocks. "That's going off a growth trajectory of earnings of roughly about 17% and revenue growth expectations of roughly 7%. So, this slice of the market, the NASDAQ 100, has the get-up-and-go that justifies the valuation."

Morganlander is particularly optimistic about companies large cap NASDAQ companies like Cisco, Oracle, and Microsoft. "We think with those companies, you see consistent earnings growth," says Morganlander.

"You see balance sheets that have a tremendous amount of cash with very little debt. And, also, they have this viability to them that we believe in the coming years will make the markets go higher."

Ross sees the fund that tracks the NASDAQ, the PowerShares QQQ, as having traded in an upward-sloping trend channel for the past nine months, with the 100-day moving average serving as its support. However, the QQQ recently showed a rounded top pattern.

"That's a sign of distribution," says Ross. "When that distribution comes at the tail-end of a five-year bull market, you want to look out here."

The QQQ closed at $88.51 on Tuesday. According to Ross, a break below the 100-day moving average, currently at $86.79, means the next support level is at the 200-day moving average, now at $81.55. "That's a significant move down and it could come in a hurry," says Ross.

To see the full discussion on what's next for the NASDAQ with Morganlander on the fundamentals and Ross on the technicals, watch the video above.